our targets and framework are things that we can all agree on. and it's exactly how we approached our discussions in the biden group, my discussions at the white house a year and a half ago and for that matter, in the joint select committee. and if the president doesn't agree with our proposal and our outline, i think he's got an obligation to send one to the congress. and a plan that can pass both chambers of congress. if you look at the plans that the white house has talked about thus far, they couldn't pass either house of the congress. we are ready and eager to talk to the president and to work with him to make sure that the american people aren't disadvantaged by what's happening here in washington. >> good morning. you know, i think at this point, pretty much most folks in the country and certainly in this town know where both sides are on taxes. i think we understand that. but to the speaker's point, we have not had any discussion and any specifics with this president about the real problem, which is spending.

we have got to do something about the spending. and obsessions to raise taxes is not going to solve the problem. what will solve the problem is, doing something about the entitlements, taking on the wasteful spending in washington. we can't just keep borrowing money and raising taxes and expecting the problem to go away. that is our point to the president. and as the speaker said, we want to sit down with the president and want to talk specifics. we put an offer on the table now. he has out of hand reject that had. where are the specifics and where are the discussions? nothing is going on. the people of this country are suffering. we ask the president, sit down with us and be serious about the specifics in the spending so we can stop the wasteful spending in washington and finally address the problem. >> as we continue to try to solve the fiscal cliff, the thing we have continued to look at is our economy. today in the whip's office we will have small family-owned businesses in there and talk about ways to protect the family business, continue to grow while at the same time make

sure we solve this fiscal cliff. look, each and every day as we walk the halls, you continue to ask the questions. you want the answers to solving the fiscal cliff. we put the offer on the table and the president now has to engage. the next 72 hours are critical. if he sits back and continues to play politics, that will give you the answer of where we're going. this is the opportunity for the country to lead and opportunity for the president to lead. >> as these fiscal cliff negotiations and debate continues, i think it's important to remember that washington doesn't have a revenue problem, it has a spending problem. and under this administration, under president obama, we have seen record deficits and a record debt accumulate, and yet he keeps demanding that we raise taxes to pay for more

spending. this will only hurt our economy. ernst and young has done an analysis of the president's proposal and said it will cost several hundreds thousands of jobs. there is a better way and the speaker has laid it out. it is an approach that calls for tax reform by reforming the tax code and passing responsible spending cuts in order to get our fiscal house in order. that's what america wants. this is our opportunity to do the big things. this is our moment to provide that leadership that america desperately wants and we stand here ready to take the action necessary. >> the american people are hurting right now and now is the moment where we need to step up to the plate and solve the problem. i don't know how any of us can look our kids and grandkids in the eye and explain to them that we aren't willing to pay for the things we are enjoying today but just going to send them the bill. that's why republicans have the proposal on the table that

fixes the problem, puts us on the course to solve the problem, which is the out-of- control spending side of the ledger. we have come to the table with receive news. in fact, i think our receive news address the issue better in a pro-growth fashion fixing an old tax code that is out of date. we hope the president will be coming to the table and be serious about negotiating. >> president obama has an unbelievable opportunity to be a transformational president, that is, to bring the country together uniquely and solve this debt problem in ways that other presidents haven't really had that opportunity, or he can dissolve into zero-sum-game politics, where he wins and other people lose. i have seen an attribute in president obama when i served with him in the state senate

where he was able to rise above and transform some very controversial issues in a way that was powerful. and it's my hope that president obama rises to this opportunity, avoids this zero-sum-game splash and instead leads the nation in ways that only one person can do, that is the president of the united states. house republicans are prepared to get to yes. house republicans are not prepared to get to foolish. and it is foolish to reject president obama's own self- described architecture of $3 in spending cuts for every dollar in new revenue. we are prepared to work and call on the white house to do the same thing. >> speaker boehner, president obama, the white house projection last offer -- \[inaudible]

53% of americans will blame republicans in congress if you go over the fiscal cliff. how long can you have that hard line on those making 250 and above. >> america faces a very serious problem and our goal is to make sure it gets solved. we have a debt problem that is out of control. we have got to cut spending and i believe it is appropriate to put revenues on the table. the receive news we are putting on the table are going to come from, guess who? the rich. there are ways to limit deductions, close loopholes and have the same people pay more -- more of their money to the federal government without raising the tax rates which we believe will harm our economy. \[inaudible question]

>> i think our members understand the seriousness of the situation that our country faces. trillion dollar deficits for as far as the eye can see. $16 trillion of debt on the books. every man, woman and child owing the american government $50,000 and that number is increasing every single year. as a result, our members understand that we've got to solve the problem, and we will. >> the house is going to leave today with two days left in the week -- \[inaudible] >> the house leaving with the fiscal cliff -- >> i will be

here and will be available any moment to sit down with the president p to get serious about solving this problem. >> does the conference realize that you don't seem to be negotiating? >> our members believe strongly that raising tax rates will hurt the economy. closing loopholes, especially on those who are wealthy is a better way to raise this revenue than raising rates because raising rates will hurt the very people we are expecting to help create jobs in our country. thank you everybody. captions copyright national cable satellite corp. 2012] \[captioning performed by national captioning institute] >> house democratic leader spoke with reporters in the capital. this is 15 minutes. >> we are back.

>> i know that you appreciate that we all have a day job and this is part of it. but we want to make sure that our ranking members that he leaves so effectively to make sure that we get all the members. let's start with you. >> allowing the middle class tax cuts, the debt limit on the table. >> consider that the republicans agree the new income tax will be a victory for the

american people. it is becoming more if he does do that. passing the tax cut means the end of holding them hostage. >> i share the leaders view, this ought not to be a bad time. the economy and working americans, 98% pass the bill. they have the assurance that they will not be subjected to an increase in taxes january 1.

it will add immeasurably to the confidence of our economy and that is why we ought to do it. it is not a question of a tactical advantage. working americans will have the assurance that they will still have the resources to anticipate growing the economy. >> every movement has to have an answer. i think that we continue to focus on the middle class. we continue to defend and stand for the middle class moving towards what we have in the fall right now with the mohsen -- the motion to discharge. we should move on that and then we have other things to deal with this year. to send a message to the american people, it is time to move forward and get down to

doing the business of the people of this country. >> i don't think the issue of the middle class tax cut was disputed. neither side is going to get an advantage. i continue to believe that the overwhelming majority of republicans don't want to see the working americans, 98%, get a tax increase. the american public are saying to themselves, you guys all agree, why don't you do it. even when we have disagreements, the other side has refused to put that agreement on the floor so we can enact it. >> i will ask the both of you, don't you think that this request is expected to be so

large, does it have to be enrolled in this conversation because you get 1.2 or 2.2 or what ever is, you have it coming off of the supplemental that. dodge the middle-income tax cut being part of that conversation? i don't think the debt ceiling has a place in all of this. i think that we continue with the rule that says the president sends it over, that is overturned. we have a path away from that because it is holding hostage any investments in the future that we can make. in to the revenue challenge

that we have. but not that this will be too complicated. there are steps that we need to take. bypassing the middle income tax cut, it is deliberation in terms of discussion on how we go forward. a package that recognizes we have to establish priority more than others and make cuts to make sure that the judgments that we make on cuts are further up close for the economy. all of our colleagues have to our country that will be able to reach an agreement. and not to make it too

complicated, a good first step to be to pass -- >> first of all, we need to pass the supplemental. the people of the northeast were somewhat spare on this, but the people of new jersey and connecticut, they have had a very damaging blow. we need to act on that. the way we can meet the immediate need. it is part of the math. we will have to consider all the expenditures that we make, we'll have to make that part of the agreement. whatever dollars that we expand will have to be accounted for and will have to be paid for over a longer time. it severely and adversely affected damage, we need to

make that expenditure now and we need to pay for that over the longer term. for my of standpoint, part of the math that will have to be dealt with. >> i have taken home in good faith of what we know about the speaker's remarks as it relates to this catastrophe. i don't think anybody wants to see them in royal in politics. they are still without power. in many parts of the city in the region, we're really pushing back the decades and it is hard to understand unless you have been there.

i think the speaker is sensitive to that, the remarks are very positive that we need to address the needs of the people. i would hope that this would not get embroiled in what already seems to be insurmountable problems. this needs to be addressed immediately. >> the moment when the people look to the public sector to say, do we really have this contact? are you there for us? when the storms hit last time, the members came to us and said the devastation was so great, it changed the character of our community. the same thing can happen now

unless we are there for the people. i agree with you that the speaker has been gracious and open with what i have heard has to honoring the social compact that we are there in times of natural disaster to remove doubt in people's mind that this will not be a political debate but a values debate. $700 billion for the tar funding. the chairman of the fed said that if i don't act immediately, we won't have an economy by monday. we acted.

we had a debate and we acted. the taxpayers have been made: that and i believe that the investments that we make in this recovery will have a very positive effect on the rebuilding and the jobs that come with it. the more important point is the connection between the people and the government is one that is honored. >> what is the democratic contingency if the government is raised by the end of the year? what is the democratic contingency? >> the president has put forth in his budget, the leadership of chris van holland, we think all of this should go. if we take the middle-income tax cuts off of the table, then we end the hostage taking the

republicans have engaged in. we are not going to do that unless you give tax cuts to the wealthy. i think those are areas of agreement as we go forward. i will not put forth what that is today because we go to the table to negotiate. >> the debt limit ought not to be held hostage to anything. it hurt our economy, the credit worthiness ought to be not at risk or four negotiating. those that are focused on the economy in try to grow jobs and build our economy, many will tell you this ought not to be a subject of political debate.

i think from that standpoint, first of all, the president wants it part of the agreement so that we do not harm the economy or the creation of jobs and hard working americans by making that part of the debate. >> i want to take a moment to have knowledge of the passing of our former colleague, chairman jack brooks of texas. we were looking forward to his ninetieth birthday in the month of december. he was surrounded by his family. right before the election in texas where he was completely knowledgeable of everything that was going on, he had the courage to pass the crime bill that had the assault weapons

ban. it took courage and he paid a price for doing the right thing. another member of our leadership came after mr. brooks left us, but we all share a great pride to call him colleague. and his family in beaumont texas and his many fans throughout the country and in this congress. thank you all very much. >> senate democrats are urging house republicans to pass the middle-class tax cut. this is a little more than 20 minutes.

>> we're here to encourage the leadership to take up the bill that we passed on july 25 that would continue and make sure that taxpayers have tax cuts and we have 27 days left before middle-class families see a tax hike that will average $2,200 a family. and when folks are getting ready for christmas, they tried to get the toys out of layaway so that children have what they want to give them for christmas and they are getting ready for the new year, families need to know that they will not have extra tax bills that total $2,200. it is fair, it is one thing that we agree on and we need to get that off of the table. we have a number of different

issues to address. we have already passed $1 trillion in spending reductions. we can pass a middle class tax cut that guarantees that the first $250,000 of your income is protected from the tax hike. everyone gets a tax cut, it's just that those that are not as well off get an extra tax cut. 98% of the people would see tax cuts next year if we extend all of these middle-class tax cuts. in michigan, to share with me what $2,200 means to them. one of them said it was four

months of groceries. that is a big deal. we were figuring out gallons of gas to go back and forth to work. it could buy -- for the average commuter, they could go back and forth to work for three years. 650 gallons of gas. when families are going into the holidays, they need to know that we get it. we see every day, republicans in the house as well as olympia snowe that urged us to come

together to get this done. we have heard from tom cole that they pass the senate bill. we are hearing from house members saying to get this piece done. republicans said, why don't you get together and get things done? we know that if the discharge petition comes out before the house, they have enough votes to pass it. why wait 27 days? why not just do it now. the house needs to take up a bill that we gave them back in july. it passed on a bipartisan vote here and when is brought up in the house it will pass with a bipartisan vote. >> i want to echo a little bit of what the senator said.

consumers are shopping, a lot of us went through black friday and we are in the holiday shopping mode. when i was in alaska this weekend, the number one question that we get from people is, what are you doing to get the ball moving? we know there has to be a long- term plan. we sent over a tax proposal that mentioned to make sure that everyone's income under hundred and $50,000 keep their tax cut. this is a decision that can be made right now. we know that when we hear from members that that bill is up for a vote and it will pass. middle-class america will know today that that tax relief will continue.

what is the consumer sentiment? it has improved every month for the last several months here. if we cannot make this easy step, we pass this on july 25. it is not something still lingering in the senate. it is in the house. the issue of the fiscal cliff, what's it mean? it is probably the most known phrase in politics. they say, you have to wait for everything. people understand you have to do a piece of the puzzle.

you can do it today. the opportunity to keep this economy moving, it has done very well the last few years. we always wait for the big deal and something never happens. this is a chance for the middle class tax cut. i would encourage every day, what is holding it out? -- it up? you will see yourself getting a tax cut for the remainder of next year if we just move them forward. again, it is finished of the senate side.

>> i want to thank my colleagues for the leadership on the steering committee in this area. we have senator olympia snowe, bill kristol of the weekly standard, like simpson of idaho. david brooks. walter jones. the national review. we're here to say that passing the middle class tax cut is the right thing to do. you don't need to take our word for it. 2/3 of the american public agree with us. you don't need to take that word either. listen to the speaker's own party. it is clear that speaker boehner as needed cover from the right flank before he can agree to any deal with the president. the speaker did not have it before.

when the wall street journal editorial page says that it would not go against the anti- tax principles, what more does the speaker need? when he refuses to declare that decoupling would violate the group pledged, what more cover does the speaker need? when more rank-and-file republicans come out every day in favor of passing the senate bill, it gives the speaker the cover he needs. tom cole was the first on the other side to speak the truth of what should be done. he has been on tv almost every day making the case to his party in public and he was dismissed of having a minority opinion. the comments sparked a trend and those that have spoken out publicly, there are probably dozens of others that don't feel free to speak their mind

but certainly agree with him privately. the house republican leadership are like generals conquered away in a bunker that don't realize that their army in the field has already laid down its arms. the republican leaders are in search of an exit strategy. they have won in the form of a discharge petition filed in the house for the speaker. the speaker nor the republican leadership have to endorse it out right the senate bill. all the speaker has to do is tell his members, if you are for this bill to go on the floor, you won't have any recommendations if you sign the discharge petition. -- recriminations if you sign the discharge petition. there be 218 signatures.

if the speaker allowed a vote on the bill, it would pass. certainly with a good deal more than 218 votes. we might not win over the paul ryans. they can vote no or present. let the other republicans vote their conscience and this bill will pass. it was reported that senior aides are considering just such a strategy to give them a soft landing in the tax debate. they live to fight another day on spending cuts. we agree that a tax hike on middle-class americans should be taken off the table in the middle of the christmas season.

once republicans agree to higher rates on the wealthy, they can quickly fall into place. let's stop with the offers and counteroffers that are leaked only to manufacture headlines. >> senator schumer, d think speaker boehner's court -- what responsibility do the democrats have. >> pass the tax cut bill and we can move forward. it was not much of a proposal at all.

what tax entitlements would you propose cutting? and on whom? second, what medicare and other spending cuts would you propose? people propose large numbers and never fill in details. but we have filled in the details with our first step. let them tell in the details of their first step. they have not done either, so it is not much of an author -- an offer. >> they did not include having the top rates go up on the wealthiest americans. their proposal goes right back to that class. charitable deductions, mortgage relief and legislation i have had them place -- in place. there is a whole range of things you have to go through.

that is the point. we are not going to do that. we have to make sure that the wealthiest help pay down this large deficit. we have large discussions going on in the senate at various places. we know what the parameters are. the president is ready, willing, and able to sit down and negotiate this. >> the statement, we have done something. we want every tax rate to go up. the interesting part, we agree it should not go up. we disagree on the top 2%. why don't we go where we agree

and make sure those folks in the middle class don't have them increased. you have to start somewhere. we all agree on this. they just don't want to use the procedure to allow their own people to vote on it. they're holding the middle class hostage for small issues that they will continue to fight over and over again. we all agree on these rates and we just disagree on the top two. >> thank you. live to fight another day is your advice. when that other day comes, will democrats refused to entertain any discussion on entitlement cuts? >> there are many proposals that have been made by a variety of people on our side in that area.

the bottom line is very simple. ancan't until we get agreement on the tax side. we put a downpayment on the table and we were very specific. we said exactly what it is for tax cuts on the highest rates, capital gains and dividends. it was all put on the table. they put nothing specific on the table. to ask us the second step when they haven't done their first makes no sense. we're not going to negotiate against ourselves. >> on one side is the president

and the democrats have said that the threshold is not extending the rates. we are very specific. tell us where you will cut in medicare. tell us what your talking about specifically. by the way, we have already done $700 billion. that was in savings in medicare by stopping over payments and doing a number of other things that focus on prevention. of course we are willing to sit down and look at everything within the context of what is good for seniors and what is good for people. show what the line is and be very specific. >> just to remind you, we have already done $1 trillion. we are not afraid of taking on the challenge that this country is facing.

again, they have an opportunity today, right now, to make sure middle-class america not only takes this of of the who-do -- to-do list. we've done medicare. we've done our position on taxes, waiting for the specifics. it is pretty simple. >> it is bipartisan with $24 billion in cuts and deficits that they are welcome the past right now and have additional cuts. >> [inaudible] >> we ran an election on that issue, we campaigned on it, and the american people are for it. the logic is very simple. speaker boehner should go to the top rate and if he doesn't

want to himself, he can tell members of his congress that we want to sign the discharge petition with no recriminations. we will get the first major down payment on which we know has the support of the american people and both houses in the congress. and we can move forward and go to the next step. we think that the top rate is the way to go and we are seeing lots of movement on the republican side. we think that is the way to go. >> hall doesn't give republicans a lot of leverage in the next step? >> i don't see how that is the case at all. we are in a situation where there are very clear the american people would come together and get extended. they have our range of other issues.

we look at what is happening on the debt limit and there is a broader package on both sides. puts't imagine how that them in a situation where they have the leverage. now we have to go on and agreed to a larger package. >> i think they learned their lesson with the debt ceiling and i don't think it is leverage. the whole thing turned around when it looked like they would be willing to let the united states forgo its payment of debt in 2011. the whole thing turned around. i think they have learned that mistake, and any talk that that as leverage for that is false. >> you support this decoupling,

the president proposed $600 billion more in revenue from deductions. which of you supports getting taxes raised? >> speaking for myself, i think it is very important that we address this issue, they don't have an additional $2,200. do we have other areas that we need to look at? we can look globally how to be competitive. i would argue for a number of things that would focus on domestic manufacturing. there are areas where we can come together and negotiate. senator baucus and hatch have pulled us together. i think that we can get that

piece done if the first piece is off the table. i am not sure i would lock myself into an exact number, but i believe there is more that we can do. >> i think it is harder to get the $4 trillion deal without the revenue. >> as we move forward, i sponsored with other democrats and republicans tax reform legislation. generally, this is where you remember that this is a big problem that has accumulated over 40 years. there has been a lot of discussion. start doing something. this bill is a start. all of us have ideas. some of us of her revenue ideas.

clearly, we all agree on this. >> would you support turning off or delaying the sequester? >> i think that we would come together on additional downpayments. a lot of members would like to see us do something that would be a short-term alternative at minimum. on sequestration, we go back to the farm bill with savings. >> do you have anything to do with agriculture? >> i don't. but it is the truth. frankly, we came together so i know that tough decisions can get done. there is a way to take the farm bill savings and a couple other things, put it together to create a down payment.

>> [inaudible] >> if we have a joint agreement on policy, i believe they will take out policy along with the cuts that we propose. >> republican senate minority leader mitch mcconnell also talked about the so-called fiscal cliff on the floor of the senate. >> it was widely assumed among republicans that president obama and democrats back toward to avoid it. that was the common goal, or so we thought. over the past couple of weeks, and has become increasingly clear to many of us that we were simply wrong about that. incredibly, many top democrats, including the president, seemed perfectly happy to go off the

cliff. that is why the president has been more interested in campaign rallies than actually negotiating a deal. that explains why the president is stubbornly insisting on raising tax rates when he himself said just last year that you raised more revenue from capping deductions than closing loopholes. this is not about the deficit for them, or balance. it's about an ideological campaign that most americans thought would have ended on november 6. the president said timothy geithner of beer with a proposal -- up here with a proposal that was more a provocation than a proposal, to be perfectly frank about it. it was a message that the president really does not want to deal at all. today not a single senate democrat has come forward to support the geithner proposal,

and anyone who looks at the details would certainly understand why. it includes but $2 trillion tax increase over 10 years, the biggest real dollar tax increase in u.s. history. it increases taxes on nearly 1 million small businesses in the middle of a jobs crisis. this type of rate hike would cause more than 700,000 americans to loseheir jobs. it raises taxes on investment income, harming economic growth even more. it includes tens of billions of dollars and more washington spenng in a deal supposedly to cut the deficit, and most of radius of all, it gives the presidents of the united states unilateral power to raise the so-called debt ceiling, whenever he wants. or as much as he wants. while i am flattered that the administration has taken to

calling it the mcconnell provision, they seem to have forgotten how the proposal work in the budget control act. we gave the president the authority to request an increase, but that was only after the white house agreed to two trillion dollars in cuts in washington spending and agreed to be bound on the timing and amount set by congress. this time, the request is for the president did have the ability to raise the debt ceiling whenever he wants for as much as he wants, with no fiscal responsibility or spending cuts attack. this is an idea opposed by democrats and republicans alike. it is a power grab that has no support here and is no only completely dishonest coming it is juvenile to compare it to last year's debt ceiling agreement. it would also be incredibly irresponsible, since history shows the only major deficit cutting deals we ever do around here comes after debates over the debt ceiling.

it may be a good idea if you don't care about the debt, but it is a nonstarter for those of us to do. it also represents a dgerous attempt by the president to grab more power over spending, power that congress must not and will not cease. beyond these details, not only with the president's plan raise taxes on certain individuals, it would cap their ability to deduct donations they may to charities, the interest they pay on mortgages, the contributions they make retirement accounts, and the value of employer based health insurance. don't get me wrong. you have heard me say that democrats insist on -- tappan the deductions is a better way to raise revenue. it is a recipe for economic disaster. the president's proposal would also subject him to thousands of small businesses and family forms to a massive tax hike to be paid by the family a bomb

that death of the owners. it would impose a crushing tax increase on industries that employ millions of americans, including manufacturers in my state, businesses that operate abroad, the insurance industry, and would raise the price at the pump by targeting the oil and gratz -- oil and gas industry for special tax treatment. it is so ridiculous, as i've said repeatedly, it would not pass the house under speaker pelosi. that is why even the most liberal members of congress, the presidt's most supporters, have not come forward for the white house to demand a response shows they are just playing games at this point. if you don't believe me, ask yourself how many democrats would vote for this bill. not many. but i did not think we should have to speculate. i think we should give democrats a chance to demonstrate for themselves just how serious the president's plan was. and how serious they are.

that is why i just ask consent to offer an amendment to the russian trade bill that gave them that opportunity. as i noted, i would be happy to have this vote here or as an amendment to the next bill, or as a stand alone. it will not slow down what i hope iswi passage for russia, if present's proposal was made in good faith. our friends should be eager to vote for it. i am surprised the majority leader just declined the chance for them to support it with their votes. i guess we are left to conclude that it could not even pass a bare majority of votes than they would rather take the country off the cliff and actually wo out a good faith agreement that reflects the tough choices on both sides. to be fair to the secretary and to the president, we did not just put together a bill that included his $2 trillion tax

increase. we ao added almost four hundred billion dollars in new tax stimulus measures he wanted as well. this bill contains a continuation of the payroll tax holiday, a 10% credit on new wages that wio businses large and small, and included a fix to one of the many flawed provisions of obamacare, an expansion of the tax credit for businesses that no one uses. this proposal reflected exactly what was in the president's budget and his various submissions to the budget to congress. i was eager to see this vote, to see if senate democrats for ready to support it. i think folks should know who wants to actually raise taxes and family farmers and the banks we can solve our fiscal problems without doing anything serious to our long-term liability.

our democratic friends are so focused on the politics of this debate, they seem to forget there is a cost. they are feeling so good about the election, they have forgotten they have a duty to govern. a lot of people are going to suffer a lot if we go off the cliff. that is why we assumed democrats would have preferred to avoid it. we thought this was the perfect opportunity to do something. apparently we were wrong. >> at the beginning of wednesday's one house briefing, jason furman told reporters the plan to close loopholes and lower tax deductions would ultimately hurt the middle class. this is 10 minutes. >> thanks for being here. good afternoon. i, as you can see, have brought a guest. jason furman is the principal deputy director of the national economic council.

he is also an assistant to the president for economic policy. he's somebody that many of you are familiar with. in the last several days in particular we've had a lot of questions and a lot of conversation about the issue of revenue, and how we achieve significant revenue as part of a broad deficit reduction package. it is the president's position, as you know, that we need to have income tax rates on the highest earners in america, the top 2 percent, rise. and in addition to that, to pass policies that he has long proposed that would limit deductions and close loopholes for wealthy earners. and the combination of the revenue accomplished through that reaches the target that is necessary to achieve the kind of broad-based $4 trillion deficit reduction that the president seeks. there's been some discussion about whether or not significant amounts of revenue ca be accomplished through

just closing loopholes and capping deductions. jason has done some work on this and for that reason i've asked him to come here today. he'll make a little presentation and then take your questions. >> thanks, jay. so i just briefly wanted to give a tiny bit of context, then walk you through a tiny bit of math that can be a little bit boring but is very important because it explains where we're coming from and where the president is coming from on this issue. the context is we're trying to cut the deficit by $4 trillion over the next decade, including what we did in the budget control act. that's the amount that you need to do in order to stabilize the debt and get the debt to start to be on a downward path as a share of the economy. and that's ultimately the economic goal that the president has in a debt

reduction agreement. in the president's plan, $1.6 trillion of that $4 trillion that we need would come from additional revenues. and it would come from a combination of allowing the rates on high earners to go back up to what they were under president clinton, and reducing the value of tax deductions and other tax benefits that they get. before i get to how much can be raised by the second, let me just say the president is very, very supportive of curbing tax deductions for high-income households. it's been a part of his plan from his very first budget. in fact, he was and remains the only major leaguer in washington that has put forward a specific, explicit plan that would limit those tax benefits for high- income households that's been examined by the joint committee

on taxation, which is the official referee for these issues in congress. that plan, though, doesn't raise the revenue that you need. so out of the president's $1.6 trillion, $950 billion comes from decoupling. decoupling is the high-income rates going away, the middle- class tax cuts becoming permanent. that gets you $950 billion of revenue. the question is could you plausibly replace that revenue just by limiting tax expenditures. there have been lots of different ideas out there. it's always a little bit like jell-o -- you look over here, the problem with this one -- well, how about this one. the problem with that could fix this, and you go back to the first one. most of them -- in fact, none of them that i've seen have been scored, as i said, by the official referees at the joint committee on taxation. but i'll just quickly take you through one that gene sperling and i did a blog post on last week, and it's been the one that i think we've heard the most in

the public debate, which is let's take the idea that you could take everyone's tax deductions, limit them to $25,000. if you have more than $25,000 in deductions you wouldn't get to take those extra deductions. it sounds like a reasonable idea. it sounds like most middle-class families wouldn't be affected -- $25,000 is quite a lot. and it's been claimed that it could raise over a trillion dollars. so could you do that instead of what we're talking about? well, then you start to look at the idea. it turns out 17 million middle- class families would see their taxes go up as a result of this proposal, households that make -- married couples that make below $250,000. forty percent of the revenue in this plan would come from those middle-class families. the president doesn't want to raise tas onam thoseies. so you fix it -- you start at $250,000 and now the proposal only raises $800 billion. but it has a cliff -- when your income goes from $249,999 to $250,000, your tax bill could jump way up. you can't have features in the tax code like that. it's something no one would ever want to write in.

you protect against that cliff with pse now you're down to only $650 billion of revenue. let's look at it from a public policy perspective. $25,000. there is a good chance your fiscal lot will be $25,000. what to take care deduction, you have used the entire thing. -- once you take the entire deduction, you may have used the entire thing. no reason to turn them in irs. the have used your cap on those items. look at the top 1% under this proposal, 97% would lose any incentive at all to give additional money to charity. these are house holds responsible for one-third of tax-deductible giving. you take away their deduction completely, you will have $10 million left a year going to

charity according to the estimates the cbo has done. $450 billion is a painful contribution to deficit reduction. it could -- is a meaningful contribution to deficit reduction. it does not get too close to what you need to satisfy what you need to have a balance plan at the end of the day. i will not walk you through the 18 other ideas that have been floated in some form or another in the public discourse. it also would raise about $500 billion to $600 billion if you just applied it to households above $250,000 and if you projected charity that would

raise in the neighborhood of $400 billion to $500 billion. other proposals would municipal bonds. at the end of the day, that is why were the president is coming from is a combination of those rates, having the tax cuts expire, doing tax expenditures. they can play a role, but they cannot make up for the revenue that you have gotten. >> host: we have been focusing on different aspects of the fiscal cliff. we want to look at capital gains tax and the estate tax. what is the estate tax? guest: it goes back to history -- it was put in place to prevent the united states from developing an aristocracy.

a tax on estates that are passed down to heirs. republicans called the death tax. they have characterized it as a bad thing. it has a lot of a populist opposition to it. george w. bush signed in a phase-out of the estate tax. the top rate stays at 55%. the exemption level started rising from $1 million and going up. it was repealed completely in 2010 for one year. then it sprang back to life as part of the extension of the bush tax cuts that president obama signed into law. you have a debate -- very few members dispute that it needs to be continued. the debate is over whether you

continue it at the current level. there is an exemption level, $10 million for a couple. or at the white house would prefer a 45% rate. that is the debate right now. there's a split among democrats. the white house wants a less generous estate tax. red-leaning states like max baucus. host: that was the headline recently in "the wall street journal," showing the senators. at its highest, what was the

estate tax? how many people did the estate tax affect? guest: we are talking tens of thousands. right now it affects 3000 estates. the exemption level is set high historical novel. it has come down significantly. big argument from conservatives is it hits small businesses and farms. the number a hits is a small

fraction. host: if nothing happens, what happens to the estate tax? guest: then it goes back to the levels of an exemption of $1 million. host: and that could hit about 55,000 estates in 2013. what do republicans want to do? guest: a lot of republicans like to see this repealed. some democrats support that on principle that there should not be an estate tax. the reality is that pretty much everybody in the room acknowledges it would be too big of a hit to the treasury to repeal it. it was extended at a rate that

they found favorable. the most likely outcome is that it continues at its current level, assuming they get some sort of deal to extend many of the bush-era tax cuts. host: the white house estate tax proposal is to increase it to 45%. host: you said there is a populist backlash on this. why? guest: conservatives have been able to showcase this as a death tax.

you are being taxed when you die. some families are forced to sell property upon the death of a family member. they have been able to strike a chord with a lot of people. it affects a small number of people nationally. it hits the overall anti-tax feeling among conservatives. the government is intruding where it should be. host: moving on to capital gains. guest: the capital gains tax goes back to the start of the income tax code where you are investing and you sell a stock or a piece of art or a piece of capital and you are taxed on the gains you have made on it.

right now that tax cut was extended. if you're in the 10% or 15% tax bracket and, you pay nothing on capital gains. you take 15% if you're in an upper tax bracket. you have republicans fighting for an extension of the current rate. president obama wants it to go back to the 20% rate. dividend taxes are on dividends that are paid out by companies. george w. bush wanted to follow parity, that they should be taxed at the same rate. what would happen when the tax rates expire, the capital gains rate would go up 20%.

the dividend rate would go to 39.6%. there would be a big gap there. they want to maintain that parity and to find something between 15% and almost 40%. why is this a battle? guest: it is a big deal for the fight over income inequality. democrats have long targeted the capital gains tax as something that makes the tax code less regressive and increases in a quality. a lot of wealthy people make money through investments. it is a big issue for

corporations and investors who feel corporations are already taxed and you're essentially putting another tax. host: who pays the capital gains tax? guest: if you buy a stock and make money, you are paying it. it tends to hit upper income earners more. anybody in the stock market will be paying that. host: if your pensions are 401(k), are you paying it?

guest: it will hit everybody in the investment community. aboutwe're talking capital gains and the estate tax with joseph schatz. here are the numbers. mike is an independent college in illinois. caller: i wanted to make three points to clarify this discussion. the reason we have an estate tax is because it is a social tax. people could buy off our congressman, which they have done because of the bush tax cuts. when you die, there is an automatic step up in basis on

the property you own. the government waives the capital gains tax on your property and you only pay estate tax. regarding the capital gains, most americans have their money in 401(k)'s. when it comes out, it is taxed as ordinary income. the capital gains tax should be treated like ordinary income because all too many people make their livelihood off of capital gains. that's what i want your guest to address. guest: so many folks make your livelihood on capital gains. that came up with mitt romney. his effective tax rate was so low.

he was paying the capital gains tax instead of income tax so was effective tax rate was 13% or 14%. the stepped-up basis is an important point as well. you pay taxes on capital gains tax, it is based on the value of the estate when you inherited it. host: the estate tax or the capital gains tax? guest: the estate tax. host: if it's an asset, you pay capital gains.

guest: right. host: we have this comment on twitter from james. guest: corporations would say the businesses are already being taxed. folk should not be taxed for investing in their business. host: double taxation. guest: that is the argument. when people die, they are being taxed again. that is the essence of the argument against the estate tax. host: can you start over? caller: a quick question about the comments of the 401(k). i used to work for a cpa firm. i understand they are income tax deferred instruments.

when you take it out, the tax you pay is income tax. the assumption is the rate would be lower. let's say the rate is 25% when you retire. that is higher than the current cap gains tax rate. it does not apply to 401(k)'s or any other income tax deferred instrument. when you take them out, you pay taxes on them. guest: that is correct. you pay income tax and presumably when you retire, you are at a lower tax rate and that is the advantage.

it is a separate issue. host: we are taking a look today at the estate and capital gains tax. if nothing happens by the end of the year, take a look at what happens at the capital gains tax. host: talk about that last component. guest: that was an additional surtax. it was a way to pay for parts of the healthcare law. they will see the top rates a bump of 3.8% come january 1. that seems unlikely to be changed as part of the fiscal

cliff negotiations. you'll still see that surtax on top of that. host: this from twitter. guest: i leave that as it is. host: is that how much it could go up? guest: yes. host: currently it is 35%. go ahead, mark. caller: the previous caller mentioned capital gains -- the

recent point about the medicare surcharge to pay for the affordable care act. if he thought it could be a solution to kill both of those birds with one stone. guest: i'm not a health-care expert. host: no problem. we have this from twitter. guest: i believe that is the case. tom in california, go ahead. caller: i have several issues with the estate tax. i am a farmer if it comes back to the normal 1 million exemptions.

we work together to build this estate. it wasn't just my parents but it is in my parents' name. i have to pay tax to something i have contributed to. host: help people understand how farmers fall into this estate tax? how is it your estate is worth more than $1 million? caller: we have about 1,000 acres in sonoma county, california and it is worth about $8 million or so. we have another piece of property. we used to have a dairy operation on his property. it is surrounded by the city and it will be annexed into the city.

the whole family created this estate. when we get the $5 million benefit, it isn't per child. you have to divide that up between all the kids. if one child, one child gets a $5 million. we continually invested plan. host: can you hang on the line? i want joseph schatz to address what you're saying. guest: there is a provision if one parent dies, they can pick

up a portion of the exemption from the other parents. it is an extremely complicated process. folks have to hire accountants and lawyers. it is enormously complicated. it has changed so much over the years. host: how much has your family spent on an estate lawyer? caller: $20,000 a year. host: how long have you been paying an attorney? caller: close to 10 years. host: how many kids in the family? caller: 3 kids. we are trying to divide the property in increments that will equal the $5 million so we can have that out of the

situation before the estate tax changes by the end of the year. you have to go through the legal processes to get this to happen because you don't know what will happen by the end of the year. we have to get the $5 million taken off the table before it goes down to the $1 million exemption. host: what about the state of california? is there an estate tax as well? caller: no. california just raise taxes on everybody making $250,000 or more.

we will get hit at the state and federal level. we have a lot of land and people that rely on us for their livelihood. we have people that work in the vineyards and cattlemen. host: tom, you are land rich. cash poor? how much revenue do you bring in? caller: it is sort of divided up now. my brother has his own operation and i have mine. i spend $100,000 in expenses and equipment. host: ok. caller: just from my end. host: thank you for the call. guest: it is interesting.

one issue is the calculation of how you set up the estate tax. the rate is the issue. for other folks that are land rich, it is much more an issue for small businesses, ranches, farms, an issue of the exemption. how they can stay under the exemption and not get hit by the estate tax. some senators are fighting to keep things where they are with the estate tax. you have wealthy families and smaller businesses who are fighting for different aspects of it. host: ray in rhode island, good morning.

caller: i used to dabble at one point with a estate tax. there are a couple of things. the estate tax is a value tax. it is based on the value of the property you own. another thing that wasn't mentioned. there is insurance trust you can buy into that will help you. that insurance money will help the people pay the estate tax. when malcolm forbes was dying,

he tried to go out and buy all his insurance. it was kind of late for him. he was on his way out. the premiums were skyrocketing. there are ways to avoid or minimize your estate tax. guest: that is a good point. look at the numbers we have talked about. 0.2% of estates are affected. there are lots of ways for estates to avoid taxation. it is not hitting a lot of people. that is an argument that democrats use. even when you shrink it, it is affecting far fewer people than you think it is.

host: $5 million exemption. it is hitting 3600 estates and 8% of farms and small businesses. guest: none of them what had more than 1% or 2% of estates. host: what is the difference between the estate tax and gift tax? guest: the gift tax is a backup and levied on a gifts that you give to someone else. it is a way to make sure that folks are not avoiding taxes during their lifetime by giving it all away at death.

before the estate tax were at different rates. that give you different advantages. that is the difference. an interesting point that a caller mentioned is that a lot of states linked their own estate and inheritance taxes to their own one. when taxes are scheduled to go up, this will have big ramifications at the state level. when the bush tax cuts phased out the estate tax, a lot of states found themselves without

an estate tax. several states established new estate taxes to bring in more revenue. host: maryann from michigan. caller: my heart really bleeds for the former who owns a multimillion-dollar estate and is wary about his one cowboy that he employs. i think that is what is wrong with this system. it is greed. host: "the new york times" is reporting this morning possibly republicans considering extending tax cuts for middle class americans. "the new york times" is reporting this --

host: any fallback plan from republicans does not include a plan for the estate tax. guest: there is no easy solution to what is happening right now. the senate passed their tax bill over the summer. it was going to include an estate tax extension, as well. $3.5 million exemption. it was not put into the bill. the bill will do with a lot of

things that are expiring but the estate tax will be left where was. that will be hanging out there. congress cannot let it hang out there for long. it shouldn't be at the level it was in 2001. it shows you how many things are hanging out there. even if fallback plan -- host: back to the capital gains tax on twitter. what does he mean by capital formation? guest: you want to encourage

people to invest. you encourage people to invest by having a low capital gains rate. warren buffett and other said investors are going to invest in a matter what the tax rate is. the tax rates will not be persuaded against investing the way they do now just because it rises 5%. philosophical argument has been you want to encourage people to invest and that is why you keep a low rate. as part of the tax reform that people are looking back to now, caplet gains and dividends rates or increase to pay for lower tax rates across the board. caller: hi.

i believe that no taxpayer should pay more than 10 cents on the dollar. the effective tax rate should be capped at 10%. the plan of double taxation. we are individual taxpayers. a corporation pays an employee and the employee pays taxes. a corporation pays the investors dividends. shouldn't the corporation and the dividend pay taxes? if not, it should employees pay taxes? the concept of the double taxation for individual taxpayers confuses me a little bit.

guest: i'm not sure there is much i can add to that. when you add the taxes up, whether corporate activity is being taxed multiple times. conservatives would say yes when you add it all up. the debate continues. host: breaker on twitter says -- he is referring to the issue of capital gains. the capital gains tax will go up 10%.

host: john from new mexico. caller: thank you for taking my call. you read my tweet just a little while ago. i want to continue on this theme of the lower capital gains rate. this low capital gains rate is a way the uber rich use to control to give themselves their own tax rate and their own general tax category to there everything in. they can lessen their participation in our democracy. i have investments, too. to only have to pay a 15% rate on that income seems silly to

me. i pay normal taxes and normal social security. there is no need to incentivize capital formation these days. host: are you retired? caller: i am still working. host: this is a story from "the wall street journal." host: "families with adult children." how can you take advantage if you're a couple and one spouse earns more than the other? guest: i would not want to

delve into that. host: we will move on to jim in north carolina. go ahead, jim. caller: thank you for taking myy call. the lowering to the $1 million cap. my wife and i have never made more than $60,000 a year. we have amassed about $850,000 in amassed and we have a property and we have inherited a little. we would pay 55% of the $300,000, which seems pretty exorbitant to me. the other comment i would like to make would be god only wanted 10% from the israelites.

the high taxation rates seem kind of wild. inflation has driven everybody to the $1 million level anyway. guest: 10%, god -- it goes to the fundamental issue of the opposition of the estate tax. it strikes a chord with a lot of people. host: we have this from twitter. holly from indiana. you are on the air. caller: ok. i am a farmer from indiana. we own about 300 acres and we formed an additional 500.

if we have to pay the taxes, we have to sell the land and we no longer have they job. if we don't have the farm land, we can make a living. if we do not farm that land, the united states will be relying on other countries for food. host: you have about 300 acres. caller: we also have our inventory. host: give people an idea how much the machinery costs. caller: the combine is about $1

million. host: how do you finance that? caller: you take out a loan. it will cost hundreds of thousands of dollars. you hope for a good year. this was a wobble year. you take out more loans for next year's crop. host: what do you put up for collateral? caller: your land and your assets. you might have farm buildings. host: has your family ever had to give up land or grain to pay off these loans? caller: oh, yeah.

you just carry them on from year to year and so you have a good year. the farm income goes way up our way down. host: give us an idea of revenue from year to year. caller: let me put my husband on. does the books. revenue from a year to year. caller: it varies from negative $100,000. some years we can make $200,000. host: how are you preparing for the estate tax? caller: which is took an estate-planning lawyer. my dad is 94 years old and he

owns most of the land. he dies, it would be protected -- would have to sell off. host: the exemption is $1 million. are you over that? caller: yes, with all the assets. host: holly and her husband. guest: this is the essence. you're talking about folks who have farms and a lot of assets that will put them over $1 million, over whenever the threshold is.

they would have to start selling the land and the farm to pay that tax. there is a perception. critics of the estate tax has said that the vast majority of folks paying the estate tax. there is a portion of them but they are the most compelling case against the estate tax. families with billions of dollars that can more likely of ford it. host: any discussion about trying not to include or exempting land or big assets like the combine. guest: it has been more focused on the exemption level. that is what they have in mind when they write the exemption

level. i have not heard anything about exempting anything specific. host: perry in mississippi, go ahead. caller: on the taxes, capital gains. how did people expect to get out of poverty? i worked in a furniture factory. now maybe i make middle income. around here and there is no way to get out. i learned how to invest by reading books. the money i put in the stock market i work for and i pay taxes on the money. if i'm lucky enough to pick a stock that makes money, i have to be taxes on it.

if your guest can explain -- what is the number at which i'm tax opposed to warren buffett? host: what is your tax bracket? caller: it varies. i am a self-employed. concrete. very hard work. my wife has quit her job and works for me. we could make $80,000 one-year. the next year, $40,000. guest: if you're in a low tax bracket, you are not paying anything. that will go up to 10% and 20%

if the bush-era tax cuts expire. the larger issue is poverty and benefits from the bush era tax cuts. that has been a big issue as inequality has become a bigger issue. the capital gains rate has come up repeatedly. it has created greater inequality. the folks at the top end of the scale end up paying less in taxes. host: we have this from our twitter page.

james in d.c. caller: i'm an attorney and work in probate. this is a sleeper issue the journal me it has not covered. i don't think people realize the estate tax will increase. families are going to get whacked. host: hold on. d.c. has its own estate tax? caller: i am referring to the estate tax. host: ok.

caller: if you die -- and have $10, theoretically you owe the district 99 cents. host: got it. host: how are you preparing your clients? caller: it depends upon the family. they have a couple of weeks. i am not taking my normal ski vacation. we have a lot of work to do. you have to move assets. you have to take your house and put it in a trust. 55% is a high rates. some people may have to sell real estate to pay the tax. host: give us an idea of an average client. caller: we get a line of

government workers or people working in the government sector. people who work hard. they have a house. real estate is expensive. a five million-dollar house is not uncommon in d.c. you have half of your exemption gone. host: the state to take the house and put it in a trust. caller: you have to put that in a non revocable trust. it gets complicated. do not do this on the internet. you can make use of non revocable trust. you can make it an asset. the average person doesn't know that. host: how do you do that in two

weeks? caller: you can do it. most people's major asset is their home. for people that have more money, it gets harder. give now. if you intended to give money to your kids, do with this year. get it out. if you wait, it is going to be harder. this gets complicated. you have an exemption. there is a current level of how much you can give to any one person. that right now is $5 million tax free this year. next year that drops to $1 million. if you wanted to give money to your kids or give your kids and house, this is the year to do it. do not wait until next year.

guest: the geographic impact. folks in high real estate markets. there has been talk about the mortgage interest deduction. on the estate tax, there is a big geographic element. farms and ranches, big deal.

he is a lawyer. geographic divides are important. host: allen in texas. caller: good morning. they are going to increase the capital gains tax and already people are dumping stocks to avoid what may happen. in these people in the position -- another good place to put money is in housing. create another bubble like we just went through. but a house, sell it, and there is no capital gains tax.

guest: there is a lot of -- i could not speak to whether there is a transfer into real estate. a lot of companies are paying out dividends right now. there is a lot of activity that seems to be going on in terms of folks dumping stocks to avoid what may happen because of the uncertainty of what happened on january 1. host: talking about dividends -- guest: they are trying to get in before the deadline. host: who are these folks? guest: the shareholders that are getting dividends.

host: chris from arlington. caller: about the state tax code to help farmers. there is a provision that allows land placed into an easement to get an additional exemption to protect farmland from having to be sold. host: joseph schatz? guest: another element -- another thing that drives down the number of estates. that is how you get down to the 0.2%. host: this is from dedi.

host: who is she talking about here? guest: probably talking about hedge funds, hedge fund managers, folks on wall street's, the top income earners. host: that is how they make their money. guest: they make the money on investments as opposed to salary and wages. that is the argument from a lot of democrats and liberals. it is those moneyed interests that have lobbied to keep this rate low.

host: they do have a lobbying presence in d.c.? guest: i would say they always do. host: vaughn, independent caller. caller: morning. i have comments and questions. we're hearing people call and make a statement regarding their estate planning and concern for other people that work for them. you mentioned the hedge fund managers. of the other banking corporations. they are not my concern. my concern is people like myself who work every day.

i worked as a contractor. i might have a small stock investment and small ira, a small portion of a small trust that was left from a family member. it is those of us that will fall at that crest. it is those of us that will fall right at the crest, when it drops down to $1 million, $1 million in property we are struggling to pay taxes for -- we are going to have to sell property to actually keep the property. host: you have to be our final word on this. thank you for calling in. joe schatz, thanks for helping our callers understand. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> they looked ahead of how negotiations on the fiscal cliff might affect the schedule. this is half of an hour. >> suspension of the rules, a complete list of which will be announced by the close of business friday. additionally the house will appoint conferees for the national defense authorization act now that the senate has completed its work.

as was announced last week, the house has a number of outstanding legislative items that we must resolve and first amongst them is the so-called fiscal cliff. though the house's targeted adjournment set in october of last year was december 14, that is no longer the case. instead members are advised that the house will now be in session the week of december 17, exact days will be announced next week. members are further reminded that the house will not adjourn the 112th congress until a credible solution to the fiscal cliff has been found. i thank the gentleman and yield back. mr. hoyer: i thank the gentleman for his comments. i thank him for the early notice on next friday. mr. speaker, the house is still not in order. the speaker pro tempore: the house will come to order.

mr. hoyer: i thank the speaker. first, mr. leader, if i could, we have the ending next thursday, so -- i want to clarify pour members so that they know. we will not be in session next friday. is that accurate? mr. cantor: mr. speaker, i'd say to the gentleman, that is correct. mr. hoyer: thank you for that information. i also want to congratulate the gentleman for providing for the week of the 17th. i know none of us want to do that but i appreciate the majority's focus on the business that has not been done. i also appreciate the gentleman's focus on the fiscal cliff and indicating that we need to resolve that prior to leaving the 112th congress. i think those are both positive announcements. i applaud him for that. on the fiscal cliff, we discussed this all the time but

i want to inform the majority leader, there are now 175 signatures, we hope to have more, and would obviously welcome people on your side of the aisle, on the discharge petition for the walz bill which mirrors the senate bill as the majority leader i'm sure knows, to assure that no individual who makes $200,000 or less in net taxable income or a family of $250,000 or less will have -- see a tax increase on january 1. hopefully we will resolve the fiscal cliff, get an agreement. but i again ask my friend, the walz bill will be compliant with the rules. it will not have a blue slip problem, obviously. and hopefully we could move that bill.

again, for the purposes of giving confidence to the 98% of our taxpayers who are making less than the sums put forward in the bill, $200,000, $250,000. i understand and anticipate the gentleman's response, that we are all concerned with growing the economy, creating jobs. we don't want to dampen that dam and we understand the gentleman's concern about small businesses, particularly those 3% of small businesses who make more than this and report it on a personal income basis. but i would hope that we could give serious consideration to trying to act sooner than the end of the year and as soon as possible, frankly, on the mid -- as we call it the middle class tax cut, the $250,000 and under and i yield to my friend to see whether or not perhaps the actions that have been taken this week have any bearing on his thoughts on whether we can

schedule that bill. and i yield to my friend. mr. cantor: mr. speaker, i'd say to the gentleman, i don't think it is a good thing right now to bring that bill to the floor because we hope that we can have successful negotiations with the white house. as the gentleman has said earlier this week, mr. speaker, that our side actually put on the table in our letter to the president some specifics. specific proposals that actually deserve a response from the white house. that's what we're looking for, mr. speaker. is are we going to get a response to our proposal about putting revenues of $800 billion on the table, putting out there a framework for spending reduction? because i know, mr. speaker, the gentleman has greed with me -- agreed with me, we've got to do something to address the spending problem. because you can't keep taxing and borrowing without doing the other side, which is take care

of the problem of spending. and i think that the letter and the proposal that we sent to the president deserves a response, mr. speaker. and if we don't get a response, then perhaps the president will be willing to meet with us. one or the other. because it doesn't seem to me to be upholding the obligations to the american people that we're going to resolve this issue if we just, you know, stand still. we've put these specifics out on the table, the president's not responded. we asked the president to respond, mr. speaker, and i'd say to the gentleman, i hope that that's what can happen. a respond from the president, not just a summary rejection, but a specific serious response in the nature of our proposal. or if the president would agree to sit down and talk about it. that's what we've got to do to fulfill our obligation. i don't think bringing that bill to the floor, mr. speaker, is going to further that likelihood.

so, with that i yield back. mr. hoyer: i thank the gentleman for his observation and he and i do share the view that we need to address both revenue side and the spending side of our budget. my view is, and i've said this on a regular basis, what where he really have is not necessarily a taxing problem or spending problem, we have a pay-for problem and the saxes -- actions that we take, we ought to pay for. we haven't done that through the years. frankly we haven't done it on both sides of the aisle. i don't want to get into that specific argument but the fact is if we pay for things, you don't create debt. and if you cut revenues and you cut spending, you don't create debt. if you cut revenues and don't cut spending, you create debt just as surely as if you spend money and buy things and don't pay for them. in either instance you create debt. and we need to get this country on a fiscally sustainable path. so i congratulate the gentleman -- or not the gentleman specifically but i was pleased that the -- it was -- the

gentleman and i would disagree on the specificity of the offer that was included or the suggestion that was included in your letter. for instance, the president has put forward, as you know, in his budget and in his further proposals an extensive list of reductions in spending that he proposed. in addition he put -- has put forward very specific proposals vis-a-vis revenues. his most specific proposal, of course, has been widely debated and discussed and there was a difference of opinion on whether or not we ought to cap the taxs on $250,000 and under families and $200,000 and under individuals. there was a very robust debate on that during the campaign. the voters voted and that's a very specific proposal.

in the $800 billion that you suggest in the letter, that you jointly signed with the speaker and others, there is a suggestion of $800 billion in revenues. which i probably -- which i not probably but i believe is insufficient to get us to where we need to be. but having said that, it is certainly of good start -- certainly a good start. but it is not a good start if all it is is conceptual. the president, as i said, has made very specific proposals. he wants taxes on those over $250,000 to go up that. produces a certain amount of revenue. somewhere in the neighborhood of $800 billion of which you speak. the fact is though, in your proposal we don't have the specifics other than to know that you're focused on preferences or loopholes, describe them as you may, which would be a reduction. the gentleman knows the three largest of those is the health care, the mortgage interest and

the pension benefits. that can be taken off your taxes. i don't know whether the gentleman suggests reducing those specifically and i don't ask him to respond to that now. but i do tell my friend that if we don't have those specific, as you have very specifically, i think from the president, he also recommended capping deductions at 28%. a very specific revenue-generating proposal. he's also, as i said, agreed to very substantial spending cuts which he's outlined in his budget and as the gentleman knows we've cut $1 trillion give and take some billions of dollars in expenditures pursuant to the debt limit extension of 2011. so we have addressed very substantial reductions in funding for 2011, for 2012 and for 2013. and for outyears after that.

so i would urge my friend, when he says he's given specifics, as far as i know, the letter essentially has five lines in it , the letter's longer than that, but five lines of spending and/or tax cutting proposals but they aral all generic -- but they are all generic, not specific. and i think that is the problem we have in these negotiations, to the extent that they exist, unfortunately, you know, we're not doing as much as i think we ought to be doing. we don't have specifics. therefore there's everybody can say, well, we want to get $800 billion. president and apparently your letter agree on that. how you get there is the key. and if you don't have specifics, the president's offered specifics of how to get there, i would respectfully suggest you have not offered specifics other than we're going to deal with preference items. but they're very controversial, charitable deduction, very controversial, other deductions are controversial. we have to really get down to

the knitty-gritty of, ok, how are you going to do it? and i would urge the gentleman in furtherance of what he and his party have already done to perhaps be specific in how we get the $800 billion. the president said how we get the $800 billion. i think that would be very helpful and i yield to my friend. mr. cantor: i thank the gentleman. that's really what discussions are for. that's what meetings are for is to try and get to specifics. and although he and i differ, mr. speaker, the gentleman and i differ about the specifics of our proposal and the president's proposal because frankly i know -- i think both sides know where each other are on taxes right now. certainly the president was in a different place back in the summer of 2011 when he had indicated that what was said was give us $1 trillion in adigal revenues which could be accomplished -- additional revenues which could be accomplished without tax rates

is what the perfect said. so -- is what the president said. so it is different. that's what the president said this time. so we know where each other are there. it's the specifics on the spending. and the gentleman points out, mr. speaker, that the president has submitted budgets in the past. there's been no discussion of specifics whatsoever even when the speaker or i have suggested that in meetings that we've had as to where your specifics. it is they've just not been forthcoming. so if the president's serious to actually do something about the problem, then i think we do need to come together and say to the american people we're willing to cut the wasteful spending here and in the gentleman's own words, mr. speaker, to pay for what we actually spend, not just keep spending what we don't have. i think it could really move the ball forward on these negotiations. so i accept the spirit in which

the gentleman suggests that we should have more discussions to get the ball moving forward. just the white house doesn't seem to be willing to do so. instead we see the president going on a television interview saying he's primarily rejecting our position instead of really trying to get to the specifics of the problem which is reducing wasteful spending. i yield back. mr. hoyer: i thank the gentleman. i want to say two things. i want to clarify that $800 billion clearly is in your proposal. when i said the president agrees with that $800 billion, he agrees to get to at least $800 billion. he wants more. i agree with president we need more. when the gentleman says the problem is wasteful spending, i disagree with the gentleman very substantially on that the problem is not wasteful spending. the problem is spending. whether it's not wasteful or not, if it's good spending, we feed to pay for it. now where the gentleman and i -- we agreed to pay for it.

now where the gentleman and i disagree, when they said they'd reduce spending by $2 trillion therks didn't reduce spending by $2 trillion. if you reduce revenue by $2 trillion and you uped spending, frankly, as all i know and all of us do between 2001 and 2008 and particularly to 2006, if you do that inevitably you have debt. just as if you buy stuff and don't pay for it, you have debt. so whether you reduce revenues or don't pay for what you buy, the result is depktly the same. debt. -- exactly the same. debt. so that's why i say paying for it is the problem. the gentleman and i have a disagreement on whether or not you have to pay for tax cuts. you have to pay for it one way or the other. you're either going to pay for

it by additional debt or by reducing programs. not wasteful spending. i'd like to get rid of all wasteful spending. i suggest the gentleman, and he knows the figures as well as i do because we've been to a lot of meetings together on this, the issue is not wasteful spending. it's that we decided to buy things, a lot of which i think we ought to be buying, including social security, including medicare, including investment in education, including investment in infrastructure, including investment in innovation to grow our economy which in turn will help our deficit situation as the economy grows. without raising any taxes. but the fact of the matter is i know the gentleman has historically not felt tax cuts should be paid for either by reducing it or offsetting. the president doesn't agree with the $800 billion because

he doesn't think the math works. i share the president's view. the math doesn't work. the most useful effort will be if we all agree on the onive -- objective, whether it's $4 trillion, whether it's 70% debt to g.d.p. ratio which most economists or a little less than that is sustainable or is on a sustainable path. if we all agree with the objective and then, mr. majority leader, simply make the math work to get there on a way that we could agree on, i think america would be advantaged, the economy would be advantaged and we'd see a renaissance of job creation in this country as we did in the 2000's. and i'll be glad to yield to my friend. mr. cantor: i accept the gentleman's good intentions. i know he doesn't think that we ought to be imposing additional obligations on the american people to pay more of their money into washington if the money is not going to be spent

in a way that -- that is something they would like. so if it's wasteful spending or spending just to aggravate the deficit situation. and that's from the -- you know, the perspective that we come. fix the problem. if the obsession is to raise taxes, you know, we don't -- you know we don't agree with that. but fix the problem so if you're asking for somebody to give more of their money into washington, at least be able to tell them that we are going to manage down the debt. that's what we're about here. which is why the focus on spending and how we have to ratchet down the spending in this town. and that's where we've heard no specifics or willingness on the part of the president to engage in discussions about specifics on spending. as far as the math is concerned, again, it was a very different president in the summer of 2011 when he said $1.2 trillion in additional

revenues could be accomplished that's what he said. so, again, all of a sudden that math doesn't work but it worked for 1.2 before. regardless, we sort of understand now, at least this round, where everyone is on taxes. let's get to the problem and maybe then we can resolve the taxes question. i yield back. mr. hoyer: well, we have a fundamental disagreement because the gentleman continues to want to focus on spending. i think that's right that we focus on spending. but, again, debt is not caused by spending. it is caused by buying things you don't pay for. or it's caused by cutting revenues that you don't offset, either by cuts in spending, by cutting revenues. that's what causes debt. it's not buying things that causes debt. it's not paying for things. and the discipline, i will tell my friend, in the system for the american public is if they want things, for us to say, ok,

you want a tax cut or you want a strong defense, it costs money. both of them cost money. and if you're willing to pay for it, we will do that. if you're not willing to do that, we ought not to do it. that's not been or practice, unfortunately, and we dropped the pay-go requirement, as the gentleman knows, in 2001 and actually in 2003 legally de facto we dropped it in 2001 because we had subtax cuts without paying for them. we -- we had substantial tax cuts without paying for them. i don't think the president's changed his position. i think he said -- i think the positions have changed. mr. bowles indicated that. others have indicated that. the situation has changed. it's dynamic in the sense that it's not a situation we're confronting in 2011. but this is an important discussion because it really requires us to come to make a

commonsense math decision. not an ideological decision driven by debate about spending or taxes, but on how we have a budget that is a sustainable budget for our kids and our grandkids and for our country over the long term. i think that's what this discussion ought to be about and if it is, i think we can get this challenge resolved and americans and america will say finally, finally those representatives we sent to washington have sat down together with one another and made sense. again, i want to say to the gentleman, i can't read it either. and you certainly can't read it from there, but you can see perhaps the five lines here and then the very long lines the president has proposed in terms of cuts and revenues. i think if you're expecting the president to come and say, well, we can get your $800

billion, this way, that way and the other way, he's not going to do that because he's not going to negotiate with himself. if you come to us and say specifically this is how we're going to get the $800 billion, we'll eliminate the charitable deduction, we are going to eliminate the mortgage deduction, that's something we can discuss. but if we don't have specifics on what you're going to do but just a conclusionary we're going to get $800 billion then it's hard to negotiate. we don't know what the negotiation parameters are and i yield to my friend. mr. cantor: the gentleman is saying there really is a need for discussion and that's what i'm saying today, mr. speaker. we need to sit down and discuss. we do agree on that. obviously the white house doesn't agree on that. we're trying to urge some real serious commitment to resolving that on the part of the white house. i yield back. mr. hoyer: the gentleman has indicated there is other business that needs to be done. let me briefly address those. the farm bill obviously continues to be not resolved,

not addressed. the senate-passed bill, as the gentleman so well knows, 64-35, 2/3 of the senate voting for it, we would be hopeful that that senate bill could be put on the floor. i talked to chairwoman stabenow and she and her ranking member worked very hard on that. i know our committee's reported out a bill 35-11, but that has not come out of the -- come to the floor. i hope the farm bill could be moved. i know i will be talking to some of my ag community today. they're very hopeful not a stopgap but a farm bill of sufficient length, and i think they would op-ed -- i don't want to -- i think they would opt, i don't want to speak for them, for a senate bill. no crisis will spike dramatically on january 1 if we don't pass a farm bill. also, on the violence against

women act, i know last week we had a sponsor in the chair -- i didn't know that. thank the gentleman for remind me, but the violence against women act has been passed by this house and by the senate. i would urge the majority to get us to conference on that rather than go through why i think the senate bill's a good bill and you think the house bill's a good bill, the way to resolve that is to go to conference. i urge the gentleman to go to conference on the violence against women act. i believe the president is going to come down in very short order with some preliminary numbers on the supplemental. i think i'm going to new york -- i'm going to new york tomorrow to spend time with some of our members there and seeing the devastation that's occurred. the gentleman and i know is very aware of that. we need a supplemental so we need time to do that. and it's not a very sexy issue

but postal reform is again another issue we're talking about balancing. the postal department has not been able to balance its budget, as we know. part of it is dealing with the retirement programs that they're funding. but i'm wondering if the gentleman has any thoughts on any one of those four bills. i'll yield to my friend. mr. cantor: i'll try to be brief. on the farm bill, the gentleman is correct. we will face some very dire consequences if we don't act on the very issue prior to leaving here. part of what i indicated last week is that is something we are focused on and know we have to deal with the issue prior to the end of the year. on the issue of vawa, as the gentleman and i knows, we can't go to the conference with a senate bill. the sflat has a blue slip problem. i am speaking with the president and his office in trying to resolve the issueses

-- issues surrounding the vawa bill. i have been encouraged to see that we could very well see an agreement on vawa and i'm very hopeful that comes about. but i'm encouraged about the discussions that my office is having with the vice president's office right now. that bill being a high priority of vice president biden. the issue of the supplemental, i imagine, mr. speaker, the gentleman has seen the press reports that i have and that the white house is anticipating sending up a $60 billion supplemental request for damage related to sandy, and i think tomorrow would be that day. at least according to press reports. the gentleman may know that the fema director testified to the house yesterday that the agency can meet its need through the spring associated with the disaster. approximately $2 billion has been delivered with about $5 billion remaining in the disaster relief fund.

so, again, no one is here saying we don'td --ut looking forward receiving that request and taking a look at the numbers and the need to make sure we can move forward on that as well. and lastly, mr. speaker, postal reform. you know, the gentleman and i have, yes, talked about this a lot. know that the issue has to do with the obligations of the postal service and how we can address those to create a more balanced prospect for the future, to allow for its continuance. so we are looking at that as well and the gentleman knows there's a lot of discussion, both bipartisan and bicameral, on that issue as well. and i yield back. mr. hoyer: i thank the gentleman. obviously we are coming here to meet, we're focused on the fiscal cliff, but there are other things that we could be hopefully resolving in the time that we have available to us between now and the end of the year and i would hope we would do that.

unless the gentleman has other omments, i will be pr for what purpose does the gentleman from texas rise? >> mr. speaker, i rise today, we rise today to ask to you join us in a moment of silence honoring our colleague, the honorable jack brooks, former dean, who passed away yesterday evening at the age of 89. jack brooks was a fellow texan and a good friend who served 42 years in congress. he was leader dedicated to bettering our country and will be sorely and dealer missed by his family, friends and this congress. mr. hall: i urge one minute of silence. the speaker pro tempore: members , please rise for a moment of silence.

the president has said publicly a red line for him is tax fairness and raising rates on the wealthy. if the analog to that is a red line for republicans that they cannot raise rates, you have an irreconcilable problem in the near term. then the question becomes, if the goal is to get more money from wealthy people, there are lots of ways to do that. you heard some consensus around capping deductions. there are ways to do that in terms of limiting or capping of certain deductions and credits and exclusions. there is means testing in

entitlement programs. for republicans, on the entitlement side, we will monkey with reimbursements to providers and move toward guy you added payments. all of which is good positively -- they do not fear they are going to bump up retirement ages or eligibility ages and have what they perceive to be real structural reforms and entitlements, even in the second 10. then he will have people saying, we are not going to do the tax deal or the revenue deal unless we see what they perceive to be real entitlement reforms. the parties have to ultimately say no, one can you live with, what is your red line, and is there overlap to put a deal together? what we are seeing now is each side -- there are a ton of ways to do tax reform. when i was governor i propose to cut the corporate tax rate in half and clear out a bunch of exemptions and inclusions. i thought i would get beat up from the left -- it was all my ceo's saying, what are you

doing? the details matter. we have to get away from the point -- you cannot push people to a place where they cannot go. leaders and negotiators have to understand that and communicate and figure out where their common space is. i will end where started earlier today -- you cannot corner people with no way out. otherwise you will have failure. >> i will turn to the audience -- bob? >> i wanted to respond to the entitlement piece. i am a huge fan of paul ryan. i think the guy -- regardless of if you agree, he puts things out there and things about them. i think on entitlements it is very unfortunate the ryan budget did not do anything in the first 10 years. that created an unfortunate set of expectations.

i agree -- $27 trillion of unfunded liabilities down the road. we can make changes right now to the medicare program that is not painful to seniors but painful to politicians. we can begin -- it begins to do the things we need to do. the best thing we can do for our country, the best thing we can do for those people struggling for jobs is to go ahead and do this now, put it in the rearview mirror. the only thing lacking is not intellect but political courage. secondly, we have to have entitlement reform that is real. this is where the money is. on the revenue case -- if you can get two people in the room, we can move beyond red lines as tim was saying and resolve this. among the mass of people on the democratic and republican side, i do not think there is that big of a difference.

it just takes the political courage to sit down and make the decision to get this behind us. >> they make three points -- unlike rick perry, they remember them all. [laughter] let's turn to the audience -- the first question, then we turn to the rest. >> right now we are facing a fiscal cliff. last year we were facing the debt ceiling. before that, we were looking at several potential government shutdowns. at a different level, the appropriations process has not worked as intended for years. neither has the budget process. it seems like abnormal is the normal. that type of activity in this situation where we are already looking ahead to the next potential showdown, as he suggested, with the next debt ceiling altercation, this creates uncertainty, which is

not good for the private sector and certainly is not good for the federal government in terms of its ability to function in a normal way. how can congress break out of this? >> do what we are hired to do and to appropriations in a timely manner. in virginia, we have a lot of defense contractors very concerned about sequester. many of them say, warner, warner, do simpson-bowles. everyone supports it, but no one has read it. but the top line numbers are almost the same -- next time you do a default, do not make it so awful. putting a gun to your forehead -- that is what you have done. do a default you can live with. i agree with you that the most ridiculous thing taking place in

the last years, particularly from some of those who say they want to not make the government in efficient, is this constant jerking back and forth of potential government shutdown. nothing is more inefficient to the largest organization in the world, the federal government, and the department of defense as a subset, and stopping and starting, the amount of hundreds of millions of dollars lost each time you grind to an almost near halt of government. stop contracting, restart it -- it is crazy. everybody i've talked to says, whatever budget you give us, give us a two-three year runway. >> going back to tim's comment

-- is not good to have these red lines. it is best to figure out a way so you do not end up getting past this fiscal cliff by creating another one with the debt ceiling. the best way out -- we passed a bill yesterday on the floor, it passed 98-0. that does not make news. it came out of committee -- a defense authorization bill. you had a majority and minority that work together. all kinds of amendments that were agreed to and voted on. and it passed. that is what we have not been doing. we have had bills come out of both leader offices, airdrop on the floor, that are intended not to pass but to show differences. if we can just go through regular order, things would be just fine. >> they have regular order in the house.

>> regular order in the house has not brought compromise. i would like to see things go to regular order. i am a big proponent of allowing them to work -- we do need to recognize that in the era of divided government, where you have one party in control of the white house and another in control of the house, you are going to have a lot of give and take. in that environment, commonplace is essential. if you go through the last campaign, it is not that big of an area. compromise is required. give-and-take -- people have to accept some things they do not like as part of a larger agreement. i would say getting a comprehensive agreement now that resolves many of these issues

would at least reduce the constant threat of government shutdown. that is why this is so important going forward. >> i would remind everybody we have threats of government shutdown in the past -- the famous showdown with newt gingrich and clinton. when you have divided government, you have clashes of major philosophical difference. the key is being able to have an element of compromise as part of that process. that is exactly the place we are in right now, trying to find that point. >> the best model for all of you who are working so hard on this may well be speilberg's movie about lincoln. lincoln made deals. you know what, he achieved great, great goals. it goes to the point you are making -- politicians are supposed to play politics, that

is not a dirty word. >> the legendary "bloomberg view" columnist -- margaret carlson. >> i had this plan for a couple weeks -- i thought, this could happen. when you said you cannot get people in the corner as the president has with the tax increase on the wealthy -- here is the plan. on december 31, the bush tax cuts expire. after you have your champagne and your funny hats on, on january 1 at 12:01 a.m., there is a middle-class tax cut and the top rate is 39.6%, then they are cut to 37%, so republicans get their tax cut.

the markets do not crash and all the dreadful things do not go into effect on january 1 because you fixed it and everybody saves face and gets what they want? it could be the carlson-hunt plan. >> you also get less revenue. >> they will have to give something on entitlement reform -- they will have to make that up. >> i personally believe there is going to be a resolution to the issue you are talking about before the year is over. >> the issue margaret is raising here is the one that tom cole, the conservative republican member from oklahoma has focused on. he recognizes that if you can get into january, it will be very difficult for republicans in the house to tell the american people that everybody's taxes are going up

to provide this extra tax break on the amount of income above $250,000, which is exactly why tom cole said, let's not roll the dice on that issue. the question is whether -- talking about house politics now. and of members of the house republican caucus will recognize that is not a good place to be in. it is a bad place to be in policy-wise, politically, and therefore to address the issue -- i would like to see it today, but at least in the scenario you are talking about. >> i am with potomac research group. from what i hear -- what i hear you saying is the negotiators are probably going to use a baseline different from the

congressional budget office. senator warner talks about getting savings from the tax break on wealthier americans. as i understand it, that is already built into the cbo baseline. how much are we talking about in terms of real savings, and how much in tax increases, and how much in terms of a redefined baseline? and the other question is -- can you give us an idea of what it is in terms of framework we are likely to see at the end of the year? are we going to see a bunch of top line numbers, or are we going to see more detail than that. if we see a bunch of top-line numbers, how long does it take to get to drafting legislation and building a coalition to get

it through congress? >> i would like to answer the second question. there is an old adage that says you do not learn a lot from the second kick in the shin from the mule. we have been down this road. we had 12 very high caliber people who work in the super committee -- who would have ever thought we would spend -- this outstanding group of people could not come up with $1.2 trillion in savings. it is almost beyond belief, is it not? since i know all the decisions

we have to make are not intellectually demanding, they just take political courage, i cannot agree to any process like you just laid out. i am sorry. it is not a lot to learn -- we have had two dry runs. the congress put the fiscal cliff in place so we would resolve that issue right now -- that is what we need to do. >> mark, do you want to take the first question? >> you raise a great point. this is where people's eyes glaze over -- these numbers can say whatever you want to say, but the notion, and this is where i would disagree with margaret's approach a little bet -- i do think there will be a relationship between revenues and entitlements. if we need to go bigger, we need to push all of those. there are some who say, the idea that the american people is going to buy into this notion of, ok, we will let these taxes go up. then we go through this magical witching hour -- 90% disapproval goes up to 99% disapproval. he will have general consensus that you have to get north of three -- you do this, you will

get 500 in interest savings alone. they should not be as challenging as it is. one other thing -- the only thing i would disagree with bob a little, that is on the fact that i have been a huge advocate and continue to be a huge advocate of the tax reform debate. it is a critically important piece -- you could not create a more inefficient tax code and we have right now.

folks trying to categorize current income as long-term capital gains and medicare fraud -- thinking about cutting down the differential. i am one of the major leaders in this debate, i have been hugely supportive of all bipartisan efforts. they came up to me -- just do not touch the charitable or state and local taxes. i do not think we have what it means to go through a tax reform discussion when you get down to the details. the idea that it will be painless -- that you go through the debate and end up with caps. some say, cut them all down and build them back -- in a perfect world that would be a valid exercise. i do not know how we get there. >> the definition of tax reform

is do not tax you, do not tax me -- >> on the second piece, the danger with putting goals that would leave it to the regular order -- the regular order will not produce a result. there are two ways to deal with that -- build another fiscal cliff to put on pressure, which puts us right back where we are, or have a default mechanism which has policy set

aside that both sides do not like. one thing about the baseline -- under current law, if the congress packed its bags right now and went away, at the end of the 10-year period our debt to gdp ratio would be under 1%. he would definitely solve the deficit problem. >> under 1%? >> i believe. >> the percentage of your debt -- not the deficit to gdp? >> debt to gdp. now, we do not want to get there that way. the same way we do not want to go over the fiscal class. the fiscal cliff is big austerity -- you get $7 trillion in deficit reduction over 10 years. but you do not do it you really want to do it. when it comes to the baseline, you have to work together as

part of an agreement to get to the right baseline. that does not mean it is not real world deficit-reduction. it is. does it mean it is better than current law? maybe not. but there is agreement that current law, including the fiscal cliff, is not the best way. >> we have our baseline. deficit to gdp? >> did i say that? >> just to be clear -- if you look to the 10-year period on the current base line and get under 1% deficit to gdp in 10 years -- >> because you get seven years of debt reduction under current law. >> if anyone wants to read more, please read the piece on what it takes. i thank you all for being here

today. one reason we have to end is these poor people will be so instrumental in getting us out of this mess that we have to get them back to work. >> we only wish we were winding up. >> senators, thank you, congressman, thank you. >> we will continue to examine the so-called fiscal cliff with armstrong williams. we will also be joined by sam goldfarb. live on c-span every day at 7:00 eastern. over the next hour and a half, some of yesterday's events

involving the fiscal cliff. first, house leaders discuss how continuing negotiations may affect the schedule. in half of an hour, senate leaders comment on the fiscal cliff. after that, house speaker john boehner and minority leader nancy pelosi followed by president obama's comments. the house of representatives has finished their business for the week. they looked ahead to how negotiations on the fiscal cliff might affect the house schedule. this is half an hour. hank the gentleman. i yield to the majority leader. mr. cantor: i thank the gentleman, mr. speaker. on monday, no votes are expected in the house. on tuesday the house will meet at noon for morning hour and

2:00 p.m. for legislative business. votes will be postponed until 6:30 p.m. on wednesday the house will meet at 10:00 a.m. for morning hour and noon for legislative business. on thursday the house will meet at 9:00 a.m. for legislative business. last votes of the week are expected no later than 3:00 p.m. on thursday. members are advised that this is a change from the original house calendar. mr. speaker, the house will consider a number of bills under suspension of the rules, a complete list of which will be announced by the close of business friday. additionally the house will appoint conferees for the national defense authorization act now that the senate has completed its work. as was announced last week, the house has a number of outstanding legislative items that we must resolve and first amongst them is the so-called fiscal cliff. though the house's targeted adjournment set in october of last year was december 14, that is no longer the case.

instead members are advised that the house will now be in session the week of december 17, exact days will be announced next week. members are further reminded that the house will not adjourn the 112th congress until a credible solution to the fiscal cliff has been found. i thank the gentleman and yield back. mr. hoyer: i thank the gentleman for his comments. i thank him for the early notice on next friday. mr. speaker, the house is still not in order. the speaker pro tempore: the house will come to order. mr. hoyer: i thank the speaker. first, mr. leader, if i could, we have the ending next thursday, so -- i want to

clarify pour members so that they know. we will not be in session next friday. is that accurate? mr. cantor: mr. speaker, i'd say to the gentleman, that is correct. mr. hoyer: thank you for that information. i also want to congratulate the gentleman for providing for the week of the 17th. i know none of us want to do that but i appreciate the majority's focus on the business that has not been done. i also appreciate the gentleman's focus on the fiscal cliff and indicating that we need to resolve that prior to leaving the 112th congress. i think those are both positive announcements. i applaud him for that. on the fiscal cliff, we discussed this all the time but i want to inform the majority leader, there are now 175 signatures, we hope to have more, and would obviously welcome people on your side of the aisle, on the discharge petition for the walz bill which mirrors the senate bill as the majority leader i'm sure knows,

to assure that no individual who makes $200,000 or less in net taxable income or a family of $250,000 or less will have -- see a tax increase on january 1. hopefully we will resolve the fiscal cliff, get an agreement. but i again ask my friend, the walz bill will be compliant with the rules. it will not have a blue slip problem, obviously. and hopefully we could move that bill. again, for the purposes of giving confidence to the 98% of our taxpayers who are making less than the sums put forward in the bill, $200,000, $250,000. i understand and anticipate the gentleman's response, that we are all concerned with growing

the economy, creating jobs. we don't want to dampen that dam and we understand the gentleman's concern about small businesses, particularly those 3% of small businesses who make more than this and report it on a personal income basis. but i would hope that we could give serious consideration to trying to act sooner than the end of the year and as soon as possible, frankly, on the mid -- as we call it the middle class tax cut, the $250,000 and under and i yield to my friend to see whether or not perhaps the actions that have been taken this week have any bearing on his thoughts on whether we can schedule that bill. and i yield to my friend. mr. cantor: mr. speaker, i'd say to the gentleman, i don't think it is a good thing right now to bring that bill to the floor because we hope that we can have successful negotiations with the white house. as the gentleman has said earlier this week, mr. speaker,

that our side actually put on the table in our letter to the president some specifics. specific proposals that actually deserve a response from the white house. that's what we're looking for, mr. speaker. is are we going to get a response to our proposal about putting revenues of $800 billion on the table, putting out there a framework for spending reduction? because i know, mr. speaker, the gentleman has greed with me -- agreed with me, we've got to do something to address the spending problem. because you can't keep taxing and borrowing without doing the other side, which is take care of the problem of spending. and i think that the letter and the proposal that we sent to the president deserves a response, mr. speaker. and if we don't get a response, then perhaps the president will be willing to meet with us. one or the other. because it doesn't seem to me to

be upholding the obligations to the american people that we're going to resolve this issue if we just, you know, stand still. we've put these specifics out on the table, the president's not responded. we asked the president to respond, mr. speaker, and i'd say to the gentleman, i hope that that's what can happen. a respond from the president, not just a summary rejection, but a specific serious response in the nature of our proposal. or if the president would agree to sit down and talk about it. that's what we've got to do to fulfill our obligation. i don't think bringing that bill to the floor, mr. speaker, is going to further that likelihood. so, with that i yield back. mr. hoyer: i thank the gentleman for his observation and he and i do share the view that we need to address both revenue side and the spending side of our budget. my view is, and i've said this on a regular basis, what where he really have is not necessarily a taxing problem or

spending problem, we have a pay-for problem and the saxes -- actions that we take, we ought to pay for. we haven't done that through the years. frankly we haven't done it on both sides of the aisle. i don't want to get into that specific argument but the fact is if we pay for things, you don't create debt. and if you cut revenues and you cut spending, you don't create debt. if you cut revenues and don't cut spending, you create debt just as surely as if you spend money and buy things and don't pay for them. in either instance you create debt. and we need to get this country on a fiscally sustainable path. so i congratulate the gentleman -- or not the gentleman specifically but i was pleased that the -- it was -- the gentleman and i would disagree on the specificity of the offer that was included or the suggestion that was included in your letter. for instance, the president has put forward, as you know, in his budget and in his further proposals an extensive list of

reductions in spending that he proposed. in addition he put -- has put forward very specific proposals vis-a-vis revenues. his most specific proposal, of course, has been widely debated and discussed and there was a difference of opinion on whether or not we ought to cap the taxs on $250,000 and under families and $200,000 and under individuals. there was a very robust debate on that during the campaign. the voters voted and that's a very specific proposal. in the $800 billion that you suggest in the letter, that you jointly signed with the speaker and others, there is a suggestion of $800 billion in revenues. which i probably -- which i not probably but i believe is insufficient to get us to where we need to be. but having said that, it is

certainly of good start -- certainly a good start. but it is not a good start if all it is is conceptual. the president, as i said, has made very specific proposals. he wants taxes on those over $250,000 to go up that. produces a certain amount of revenue. somewhere in the neighborhood of $800 billion of which you speak. the fact is though, in your proposal we don't have the specifics other than to know that you're focused on preferences or loopholes, describe them as you may, which would be a reduction. the gentleman knows the three largest of those is the health care, the mortgage interest and the pension benefits. that can be taken off your taxes. i don't know whether the gentleman suggests reducing those specifically and i don't ask him to respond to that now. but i do tell my friend that if we don't have those specific, as you have very specifically, i

think from the president, he also recommended capping deductions at 28%. a very specific revenue-generating proposal. he's also, as i said, agreed to very substantial spending cuts which he's outlined in his budget and as the gentleman knows we've cut $1 trillion give and take some billions of dollars in expenditures pursuant to the debt limit extension of 2011. so we have addressed very substantial reductions in funding for 2011, for 2012 and for 2013. and for outyears after that. so i would urge my friend, when he says he's given specifics, as far as i know, the letter essentially has five lines in it , the letter's longer than that, but five lines of spending and/or tax cutting proposals but they aral all generic -- but

they are all generic, not specific. and i think that is the problem we have in these negotiations, to the extent that they exist, unfortunately, you know, we're not doing as much as i think we ought to be doing. we don't have specifics. therefore there's everybody can say, well, we want to get $800 billion. president and apparently your letter agree on that. how you get there is the key. and if you don't have specifics, the president's offered specifics of how to get there, i would respectfully suggest you have not offered specifics other than we're going to deal with preference items. but they're very controversial, charitable deduction, very controversial, other deductions are controversial. we have to really get down to the knitty-gritty of, ok, how are you going to do it? and i would urge the gentleman in furtherance of what he and his party have already done to perhaps be specific in how we get the $800 billion. the president said how we get the $800 billion. i think that would be very

helpful and i yield to my friend. mr. cantor: i thank the gentleman. that's really what discussions are for. that's what meetings are for is to try and get to specifics. and although he and i differ, mr. speaker, the gentleman and i differ about the specifics of our proposal and the president's proposal because frankly i know -- i think both sides know where each other are on taxes right now. certainly the president was in a different place back in the summer of 2011 when he had indicated that what was said was give us $1 trillion in adigal revenues which could be accomplished -- additional revenues which could be accomplished without tax rates is what the perfect said. so -- is what the president said. so it is different. that's what the president said this time. so we know where each other are there. it's the specifics on the spending. and the gentleman points out, mr. speaker, that the president has submitted budgets in the

past. there's been no discussion of specifics whatsoever even when the speaker or i have suggested that in meetings that we've had as to where your specifics. it is they've just not been forthcoming. so if the president's serious to actually do something about the problem, then i think we do need to come together and say to the american people we're willing to cut the wasteful spending here and in the gentleman's own words, mr. speaker, to pay for what we actually spend, not just keep spending what we don't have. i think it could really move the ball forward on these negotiations. so i accept the spirit in which the gentleman suggests that we should have more discussions to get the ball moving forward. just the white house doesn't seem to be willing to do so. instead we see the president going on a television interview saying he's primarily rejecting our position instead of really trying to get to the specifics of the problem which is

reducing wasteful spending. i yield back. mr. hoyer: i thank the gentleman. i want to say two things. i want to clarify that $800 billion clearly is in your proposal. when i said the president agrees with that $800 billion, he agrees to get to at least $800 billion. he wants more. i agree with president we need more. when the gentleman says the problem is wasteful spending, i disagree with the gentleman very substantially on that the problem is not wasteful spending. the problem is spending. whether it's not wasteful or not, if it's good spending, we feed to pay for it. now where the gentleman and i -- we agreed to pay for it. now where the gentleman and i disagree, when they said they'd reduce spending by $2 trillion therks didn't reduce spending by $2 trillion. if you reduce revenue by $2 trillion and you uped spending,

frankly, as all i know and all of us do between 2001 and 2008 and particularly to 2006, if you do that inevitably you have debt. just as if you buy stuff and don't pay for it, you have debt. so whether you reduce revenues or don't pay for what you buy, the result is depktly the same. debt. -- exactly the same. debt. so that's why i say paying for it is the problem. the gentleman and i have a disagreement on whether or not you have to pay for tax cuts. you have to pay for it one way or the other. you're either going to pay for it by additional debt or by reducing programs. not wasteful spending. i'd like to get rid of all wasteful spending. i suggest the gentleman, and he knows the figures as well as i do because we've been to a lot of meetings together on this, the issue is not wasteful spending. it's that we decided to buy things, a lot of which i think

we ought to be buying, including social security, including medicare, including investment in education, including investment in infrastructure, including investment in innovation to grow our economy which in turn will help our deficit situation as the economy grows. without raising any taxes. but the fact of the matter is i know the gentleman has historically not felt tax cuts should be paid for either by reducing it or offsetting. the president doesn't agree with the $800 billion because he doesn't think the math works. i share the president's view. the math doesn't work. the most useful effort will be if we all agree on the onive -- objective, whether it's $4 trillion, whether it's 70% debt to g.d.p. ratio which most economists or a little less than that is sustainable or is

on a sustainable path. if we all agree with the objective and then, mr. majority leader, simply make the math work to get there on a way that we could agree on, i think america would be advantaged, the economy would be advantaged and we'd see a renaissance of job creation in this country as we did in the 2000's. and i'll be glad to yield to my friend. mr. cantor: i accept the gentleman's good intentions. i know he doesn't think that we ought to be imposing additional obligations on the american people to pay more of their money into washington if the money is not going to be spent in a way that -- that is something they would like. so if it's wasteful spending or spending just to aggravate the deficit situation. and that's from the -- you know, the perspective that we come. fix the problem. if the obsession is to raise taxes, you know, we don't --

you know we don't agree with that. but fix the problem so if you're asking for somebody to give more of their money into washington, at least be able to tell them that we are going to manage down the debt. that's what we're about here. which is why the focus on spending and how we have to ratchet down the spending in this town. and that's where we've heard no specifics or willingness on the part of the president to engage in discussions about specifics on spending. as far as the math is concerned, again, it was a very different president in the summer of 2011 when he said $1.2 trillion in additional revenues could be accomplished without hiking tax rates. that's what he said. so, again, all of a sudden that math doesn't work but it worked for 1.2 before. regardless, we sort of understand now, at least this round, where everyone is on taxes. let's get to the problem and

maybe then we can resolve the taxes question. i yield back. mr. hoyer: well, we have a fundamental disagreement because the gentleman continues to want to focus on spending. i think that's right that we focus on spending. but, again, debt is not caused by spending. it is caused by buying things you don't pay for. or it's caused by cutting revenues that you don't offset, either by cuts in spending, by cutting revenues. that's what causes debt. it's not buying things that causes debt. it's not paying for things. and the discipline, i will tell my friend, in the system for the american public is if they want things, for us to say, ok, you want a tax cut or you want a strong defense, it costs money. both of them cost money. and if you're willing to pay for it, we will do that. if you're not willing to do that, we ought not to do it. that's not been or practice, unfortunately, and we dropped the pay-go requirement, as the gentleman knows, in 2001 and

actually in 2003 legally de facto we dropped it in 2001 because we had subtax cuts without paying for them. we -- we had substantial tax cuts without paying for them. i don't think the president's changed his position. i think he said -- i think the positions have changed. mr. bowles indicated that. others have indicated that. the situation has changed. it's dynamic in the sense that it's not a situation we're confronting in 2011. but this is an important discussion because it really requires us to come to make a commonsense math decision. not an ideological decision driven by debate about spending or taxes, but on how we have a budget that is a sustainable budget for our kids and our grandkids and for our country over the long term. i think that's what this discussion ought to be about

and if it is, i think we can get this challenge resolved and americans and america will say finally, finally those representatives we sent to washington have sat down together with one another and made sense. again, i want to say to the gentleman, i can't read it either. and you certainly can't read it from there, but you can see perhaps the five lines here and then the very long lines the president has proposed in terms of cuts and revenues. i think if you're expecting the president to come and say, well, we can get your $800 billion, this way, that way and the other way, he's not going to do that because he's not going to negotiate with himself. if you come to us and say specifically this is how we're going to get the $800 billion, we'll eliminate the charitable deduction, we are going to eliminate the mortgage deduction, that's something we

can discuss. but if we don't have specifics on what you're going to do but just a conclusionary we're going to get $800 billion then it's hard to negotiate. we don't know what the negotiation parameters are and i yield to my friend. mr. cantor: the gentleman is saying there really is a need for discussion and that's what i'm saying today, mr. speaker. we need to sit down and discuss. we do agree on that. obviously the white house doesn't agree on that. we're trying to urge some real serious commitment to resolving that on the part of the white house. i yield back. mr. hoyer: the gentleman has indicated there is other business that needs to be done. let me briefly address those. the farm bill obviously continues to be not resolved, not addressed. the senate-passed bill, as the gentleman so well knows, 64-35, 2/3 of the senate voting for it, we would be hopeful that that senate bill could be put on the floor. i talked to chairwoman stabenow and she and her ranking member worked very hard on that.

i know our committee's reported out a bill 35-11, but that has not come out of the -- come to the floor. i hope the farm bill could be moved. i know i will be talking to some of my ag community today. they're very hopeful not a stopgap but a farm bill of sufficient length, and i think they would op-ed -- i don't want to -- i think they would opt, i don't want to speak for them, for a senate bill. no crisis will spike dramatically on january 1 if we don't pass a farm bill. also, on the violence against women act, i know last week we had a sponsor in the chair -- i didn't know that. thank the gentleman for remind me, but the violence against women act has been passed by this house and by the senate. i would urge the majority to get us to conference on that rather than go through why i think the senate bill's a good

bill and you think the house bill's a good bill, the way to resolve that is to go to conference. i urge the gentleman to go to conference on the violence against women act. i believe the president is going to come down in very short order with some preliminary numbers on the supplemental. i think i'm going to new york -- i'm going to new york tomorrow to spend time with some of our members there and seeing the devastation that's occurred. the gentleman and i know is very aware of that. we need a supplemental so we need time to do that. and it's not a very sexy issue but postal reform is again another issue we're talking about balancing. the postal department has not been able to balance its budget, as we know. part of it is dealing with the retirement programs that they're funding. but i'm wondering if the gentleman has any thoughts on

any one of those four bills. i'll yield to my friend. mr. cantor: i'll try to be brief. on the farm bill, the gentleman is correct. we will face some very dire consequences if we don't act on the very issue prior to leaving here. part of what i indicated last week is that is something we are focused on and know we have to deal with the issue prior to the end of the year. on the issue of vawa, as the gentleman and i knows, we can't go to the conference with a senate bill. the sflat has a blue slip problem. i am speaking with the president and his office in trying to resolve the issueses -- issues surrounding the vawa bill. i have been encouraged to see that we could very well see an agreement on vawa and i'm very hopeful that comes about. but i'm encouraged about the discussions that my office is having with the vice president's office right now. that bill being a high priority

of vice president biden. the issue of the supplemental, i imagine, mr. speaker, the gentleman has seen the press reports that i have and that the white house is anticipating sending up a $60 billion supplemental request for damage related to sandy, and i think tomorrow would be that day. at least according to press reports. the gentleman may know that the fema director testified to the house yesterday that the agency can meet its need through the spring associated with the disaster. approximately $2 billion has been delivered with about $5 billion remaining in the disaster relief fund. so, again, no one is here saying we don't want to deliver the necessary aid to the victims because that is a priority. and -- but looking forward to receiving that request and taking a look at the numbers and the need to make sure we can move forward on that as well. and lastly, mr. speaker, postal

reform. you know, the gentleman and i have, yes, talked about this a lot. know that the issue has to do with the obligations of the postal service and how we can address those to create a more balanced prospect for the future, to allow for its continuance. so we are looking at that as well and the gentleman knows there's a lot of discussion, both bipartisan and bicameral, on that issue as well. and i yield back. mr. hoyer: i thank the gentleman. obviously we are coming here to meet, we're focused on the fiscal cliff, but there are other things that we could be hopefully resolving in the time that we have available to us between now and the end of the year and i would hope we would do that. unless the gentleman has other comments, i will be pr >> this is a little more than 20

minutes. >> we're here to encourage the leadership to take up the bill that we passed on july 25 that would continue and make sure that taxpayers have tax cuts and we have 27 days left before middle-class families see a tax hike that will average $2,200 a family. and when folks are getting ready for christmas, they tried to get the toys out of layaway so that children have what they want to give them for christmas and they are getting ready for the new year, families need to know that they will not have extra tax bills that total $2,200. it is fair, it is one thing that we agree on and we need to get that off of the table.

we have a number of different issues to address. we have already passed $1 trillion in spending reductions. we can pass a middle class tax cut that guarantees that the first $250,000 of your income is protected from the tax hike. everyone gets a tax cut, it's just that those that are not as well off get an extra tax cut. 98% of the people would see tax cuts next year if we extend all of these middle-class tax cuts. in michigan, to share with me what $2,200 means to them.

one of them said it was four months of groceries. that is a big deal. we were figuring out gallons of gas to go back and forth to work. it could buy -- for the average commuter, they could go back and forth to work for three years. when families are going into the holidays, they need to know that we get it. we see every day, republicans in the house as well as olympia snowe that urged us to come together to get this done.

we have heard from tom cole that they pass the senate bill. we are hearing from house members saying to get this piece done. republicans said, why don't you get together and get things done? we know that if the discharge petition comes out before the house, they have enough votes to pass it. why wait 27 days? why not just do it now. the house needs to take up a bill that we gave them back in july. it passed on a bipartisan vote here and when is brought up in the house it will pass with a bipartisan vote.

>> i want to echo a little bit of what the senator said. consumers are shopping, a lot of us went through black friday and we are in the holiday shopping mode. when i was in alaska this weekend, the number one question that we get from people is, what are you doing to get the ball moving? we know there has to be a long- term plan. we sent over a tax proposal that mentioned to make sure that everyone's income under hundred and $50,000 keep their tax cut. this is a decision that can be made right now. we know that when we hear from members that that bill is up for a vote and it will pass. middle-class america will know today that that tax relief will continue.

what is the consumer sentiment? it has improved every month for the last several months here. if we cannot make this easy step, we pass this on july 25. it is not something still lingering in the senate. it is in the house. the issue of the fiscal cliff, what's it mean? it is probably the most known phrase in politics. they say, you have to wait for everything. people understand you have to

do a piece of the puzzle. you can do it today. the opportunity to keep this economy moving, it has done very well the last few years. we always wait for the big deal and something never happens. this is a chance for the middle class tax cut. i would encourage every day, what is holding it out? -- it up? you will see yourself getting a tax cut for the remainder of next year if we just move them forward. again, it is finished of the senate side.

>> i want to thank my colleagues for the leadership on the steering committee in this area. we have senator olympia snowe, bill kristol of the weekly standard, like simpson of idaho. david brooks. walter jones. the national review. we're here to say that passing the middle class tax cut is the right thing to do. you don't need to take our word for it. 2/3 of the american public agree with us. you don't need to take that word either. listen to the speaker's own party. it is clear that speaker boehner as needed cover from the right flank before he can agree to any deal with the president. the speaker did not have it

before. when the wall street journal editorial page says that it would not go against the anti- tax principles, what more does the speaker need? when he refuses to declare that decoupling would violate the group pledged, what more cover does the speaker need? when more rank-and-file republicans come out every day in favor of passing the senate bill, it gives the speaker the cover he needs. tom cole was the first on the other side to speak the truth of what should be done. he has been on tv almost every day making the case to his party in public and he was dismissed of having a minority opinion. the comments sparked a trend